Interactive workbook: Go back over this again - Exercise 12.1 – Fixed and variable costs - Introduction to Accounting 2e Student Resources

Relevant costs marginal costing, and short-term decision making

Instructions

Listed below are words and phrases describing fixed and variable costs. Consider whether each word or phrase best describes fixed costs or variable costs.

a)	Avoidable costs
b)	Absorbed into products on the basis of expected production
c)	The costs of producing one more unit
d)	Unavoidable costs
e)	Relevant to the calculation of contribution
f)	Vary directly in line with production
g)	Remain the same in the short term
h)	The revenue and costs at the margin
i)	Do not change in line with production and sales

a)	Avoidable costs
b)	Absorbed into products on the basis of expected production
c)	The costs of producing one more unit
d)	Unavoidable costs
e)	Relevant to the calculation of contribution
f)	Vary directly in line with production
g)	Remain the same in the short term
h)	The revenue and costs at the margin
i)	Do not change in line with production and sales